ESCONDIDO: Water rates could rise 12 percent next year

Water customers in Escondido would face an unusually large rate
hike of 12 percent next year under a proposal the City Council is
scheduled to debate Dec. 14.

The steep hike is needed to
upgrade
the infrastructure of the city's water system, pay off
bonds from previous upgrades and cover higher costs for chemicals,
said Utilities Director Christopher McKinney, who was
hired
last month.

"I'm not aware of double-digit increases anywhere else, but the
issues we're confronting aren't going away," McKinney said. "In
past years, there's been an effort to push off increases. But at
this point, we can't defer things any longer."

Councilman Mike Morasco called the rate increase a "necessary
evil," suggesting the council would have little choice but to
approve them.

Last winter, council members
chose
to increase water rates 7 percent instead of the 9
percent recommended by a consultant. Morasco said that decision was
part of the reason a 12 percent hike is necessary this time
around.

"The last time, we tried to make it as comfortable as possible
for people, but we're facing the same problems with higher costs,"
said Morasco, a member of the council's utilities subcommittee.

Those costs include the need to rebuild the Lake Wohlford Dam
and to repair and upgrade aging tanks and pipes, especially in
downtown Escondido.

The city recently
got
a matching state grant for the roughly $25 million dam
rebuild, but McKinney said ratepayers might have to cover the other
$12.5 million if federal grants aren't available.

The city also needs more revenue to cover previous bonds that
were sold for other projects. McKinney said the interest rate could
increase on some bonds if revenues are too low.

In addition, many metal-based chemicals used to treat water,
such as ferric chloride, have increased in price recently, he
said.

McKinney stressed that the rate increase was not connected to
personnel costs, which have actually decreased recently through
employee attrition.

The hike would increase the bill for a typical Escondido family
by $5.84 per month.

Escondido has the 15th-highest water rates of 21 agencies in the
county, but would jump to seventh place with the increase, McKinney
said. But several other agencies are planning hikes this year, so
Escondido will probably end up near the middle of the pack by
year's end, he said.

Councilman Ed Gallo, the subcommittee's other member, said he
was reluctant to approve even a small increase when people are
struggling so badly. But he also said postponing the hikes seemed
like a mistake.

"It's a 'pay me now' or 'pay me later' kind of thing," he
said.

Subsidizing farmers

Rates could increase even more for high-use residential
customers if the council decided to spare Escondido's struggling
agricultural community from the brunt of the 12 percent hike.

The majority of Escondido's 26,000 water customers
already
pay significantly higher rates to provide a roughly $1
million annual
subsidy
to local agriculture.

But Morasco said it probably makes sense to increase the subsidy
even more to help some struggling farms survive long enough for the
city to start providing them reclaimed water and sewer water that's
been purified into drinking water.

The city's reclaimed water line, which runs mostly along Centre
City Parkway and Broadway, will be expanded east toward Escondido's
farms in the next few years, he said. Reclaimed water is sewage
that is purified enough for irrigation, but not for drinking.

In addition, city officials expect to move forward this month
with a
plan
to begin converting sewer water into drinking water with a
relatively new purification process that some call "toilet to
tap."

The plan would require money for new equipment and a public
education campaign to fight the negative reaction that usually
accompanies such proposals. But the plan could help Escondido
become less reliant on dwindling outside water supplies,
significantly lowering sewer and water rates locally.

But the primary customers for reclaimed water and purified sewer
water would be farmers, so it's important for the city to keep the
agricultural community afloat, Morasco said.

"They'll be our No. 1 customers," he said.

Morasco also said Escondido's agricultural community is key to
the city's "well-being."

The farms provide thousands of jobs, support the local
fertilizer industry, make the city more visually appealing and
serve as a wildfire barrier because they surround much of
Escondido.

Jennifer Persike, spokeswoman for the
Association of California Water
Agencies
, a group that lobbies on behalf of the state's roughly
450 water agencies, said frustrated customers should put the rate
increase in context.

"Water has been extremely inexpensive for a long time," Persike
said, noting that customers still pay roughly 1 cent for every 5
gallons. "You have to put it into perspective against the cost of
gas, cellphones and cable."

Sewer rates are not scheduled to increase this year, McKinney
said.

But the council adopted a plan last winter that would increase
sewer rates 6 percent per year in 2013, 2014 and 2015.